The largest private sector lender reported a 17% increase in its gross non-performing assets (NPAs) for the December quarter and the bad loan ratios worsened, partly due to decelerating credit growth. ICICI Bank’s gross NPA ratio jumped 1.09 percentage points sequentially to 7.91% for the quarter ended December while net NPA ratio rose to 4.35%. The ratios look ugly because demonetization took a chunk off the bank’s incremental disbursals and domestic loan growth decelerated to 12% as of December from 15.9% in the September quarter. Retail loan growth continues to be the bedrock of credit growth and the portfolio grew at a brisk pace of 18%. A revival in loan growth and a material reduction in slippages are essential for investors to consider its valuations justified.

Source: Mint February 01, 2017 03:24 UTC